—–as stakeholders sceptical about implementation
The Eyewitness reporter
Despite the initial hiccups that have stalled the early implementation of the national fleet project, the federal government seems to still be pushing ahead with the laudable programme.
The project, muted in 2016, suffered a temporary setback when the Pacific International Line (PIL), a Singaporean consortium that signed a memorandum of understanding (MoU) with the Federal Government to float the shipping line, withdrew its intention to be a partner in the business.
However, despite this initial disappointment, the committee, set up by the federal government to midwife the implementation of the national project and headed by Nigerian Shippers’Council, submitted its interim report to the Minister of Transportation, Mu’azu Jaji Sambo, in his office yesterday.
Receiving the report at the Ministry in Abuja, the Minister stated that, “Nigeria is a maritime country and if Nigeria gets its acts together, the country will have no business looking for money from the oil sector as a contribution to the GDP of the country.”
Speaking on how the project can be immediately realized, he said:
“I don’t know whether, in the course of the Committee’s consultations with other Stakeholders, you were able to have some conversations with the Nigerian National Petroleum Corporation (NNPC) because, If NNPC, can give 100 % support, this matter can be closed in two months,”
Earlier, the Executive Secretary, Nigerian Shippers’ Council,and Chairman, Nigerian Fleet Implementation Committee (NFIC), Emmanuel Jime, said the Committee was constituted by the immediate past Minister of Transportation, Rt. Hon. Chibuike Rotimi Amaechi, to implement the recommendations in the report by an earlier Ministerial Committee on Modalities for the Establishment of a Nigerian Fleet.
Jime who was represented by Managing Director, Sea Transport Group and member, NFIC, Umar Aminu, stated that the initiative was a way of responding to the non-participation of Nigerians in the carriage of Nigeria’s international cargo as well as the loss of freight revenue, jobs and other benefits which would otherwise have accrued to the country.
He also said: “In the course of carrying out the mandate, lessons have been learnt and some modest achievements have been recorded. These have been captured in this interim report which we are submitting today. The work is still ongoing and the goal of creating an enabling environment for the growth of a sustainable Nigerian fleet will be achieved in due course”.
Continuing, Jime noted: “There were challenges that impeded the quick realization of the project as earlier envisaged. Shipping is international and competitive in nature and Nigeria cannot operate in isolation, hence the need for the operating environment to be similar to what obtains elsewhere.
“This has been a major challenge to the growth of the sector in Nigeria. Review of certain trade policies, access to funds and technical/human capacity are issues that need to be resolved”.
It could, however, be recalled that in 2016, the federal government signed a Joint Venture (JV) partnership with PIL, on a shareholding of 60:40 for the establishment of the national shipping line.
The 60 per cent equity share was to be held by a group of indigenous shipping firms that are yet to be selected, while the remaining 40 per cent shares go to the foreign firm.
In 2018, two years after the MoU was signed, the Singaporean company withdrew from the deal, apparently because of the failure of Nigeria to bring to the table its own counterpart funding of 60 per cent.
The erstwhile Minister of Transportation, Rotimi Amaechi, blamed the PIL withdrawal on the failure of the indigenous ship owners to contribute their own share of the counterpart funding.
Stakeholders are however curious about how the new Minister will resuscitate the botched joint venture with the PIL or any other foreign investors, some of who have complained about the unfavourable business environment in the country.
Specifically, Engineer Greg Ogbeifun, one of the foremost indigenous ship owners, revealed that the PIL pulled out because the Nigerian Fiscal Policy on the importation of vessels does not make the establishment of a shipping fleet competitive in global trade.
He listed other unfavourable fiscal policies including tax laws, tonnage tax laws, and other laws that affect international shipping, but said that a recent study conducted by local shipping firms, shows that, unlike Nigeria, most countries first declare zero duty on the importation of vessel to encourage shipping business.
“The duty payable on an average, if you are bringing in a vessel, is about 14 per cent of the value of that vessel.
” So, if you bring in a vessel of $80 million, a crude oil tanker, you will be expected to pay $80 million and then in Nigeria’s port, you have to pay 14 per cent of that value to enable you to import it,” he explained.
He noted that PIL said in their writing that Nigeria must review the fiscal policy if they must continue in the partnership because the commercial terms for carrying cargo will be cheaper for a country with zero duty compared with Nigeria with 14 per cent duty.
Industry watchers however wondered the type of magic the new Minister will perform to change the narrative given the fact that he has barely seven months in office.
“The Minister may not do much to change the narrative before he leaves given his short stay in the office.
“He has between now and December to do any serious work, because, by January 2023, the electioneering campaign will start.
“And we all know that during that period, serious government work takes the back seat.
“So, tell me, what magic can he perform between now and December, barely four months?
“His good intentions on the national fleet, disbursement of the controversial CVFF and reactivation of the Eastern ports may, unfortunately, remain an illusion which may not be realised before he leaves,” a critical stakeholder told our reporter.